Hey Lazy, great to hear about your business license - I remember you talking about that a couple months ago. The short story is no, you don't need an EIN unless you:
(a) expect to make more money from your business than your income (ie, the business pays you whatever profits it has). If you wanted to have your company keep it's own money, then you probably will have to file taxes for it as a business. This also gets in to "what type of business are you" questions. The short answer is, for a sole-prop, no... unless...
(b) You plan on hiring people. If you plan on hiring, you'll need an EIN (Employer Identification Number). Then the government gets much more involved.
You'll also probably need to 1099 some of your work (independent contractor) but that varies from client to client. Most big companies require you fill out a 1099.
For what you're doing, you're probably fine until someone tells you otherwise.
Oh - and don't forget to save for tax day. Since you don't have an employer taking out deductions every paycheck, you have to remember to save for tax day. If you're making under 75k, you'll probably be fine with about 25% of your earnings (so a $4000 project means you should save $1000 for tax payment). If you're going to make more than 75k in a year, you should contact a CPA to organize your taxes in to quarterly payments, and you'll probably need to pay more than 25% - more like 30-35%.
As always, good luck!
(a) expect to make more money from your business than your income (ie, the business pays you whatever profits it has). If you wanted to have your company keep it's own money, then you probably will have to file taxes for it as a business. This also gets in to "what type of business are you" questions. The short answer is, for a sole-prop, no... unless...
(b) You plan on hiring people. If you plan on hiring, you'll need an EIN (Employer Identification Number). Then the government gets much more involved.
You'll also probably need to 1099 some of your work (independent contractor) but that varies from client to client. Most big companies require you fill out a 1099.
For what you're doing, you're probably fine until someone tells you otherwise.
Oh - and don't forget to save for tax day. Since you don't have an employer taking out deductions every paycheck, you have to remember to save for tax day. If you're making under 75k, you'll probably be fine with about 25% of your earnings (so a $4000 project means you should save $1000 for tax payment). If you're going to make more than 75k in a year, you should contact a CPA to organize your taxes in to quarterly payments, and you'll probably need to pay more than 25% - more like 30-35%.
As always, good luck!
